24 March 2009
I have come across an assessee whose certain amount of purchases has been disallowed by A.O on the ground that his inspector could not verify the address of the suppliers. But he has not considered the sales made out of those purchases. Consequently he has raised a demand on the base of Bogus Purchases. However all the transactions have been made through bank and is evidenced/verified by AO from the assessee's banker.
Please advise whether the contention of the AO is acceptable. Even so then sales made from such purchases should also not be considered since point to point transaction can be established. Please also favour with the relevent Case Laws(s).
24 March 2009
Contention of AO is not acceptable. There are various judgments which says that when payment has been made by cheques, the buyer is not obliged to go and verify the address of the supplier. File appeal against the order.
24 March 2009
assessee will assure from purchase bill supplier CST/Local sales Tax No., Pan No. Excise No. etc. if any prof found supplier paid sales tax or excise then your point is strong.you should prepair all evidence befour file any appeal.
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